TaxTMI 
TaxTMI 
2016 (10) TMI 1063
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....dition of Rs. 1,00,10,209/- made by AO on account of disallowance of Network and other Equipment cost? 2. Whether Ld. CIT(A) was correct on facts and circumstances of the case and in law in quashing the proceedings initiated u/s. 148 of the Act in this case? 3. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing. 2. The facts in brief are that the assessee filed the return of income on 27.10.2005 declaring loss of Rs. 36,03,300/-. Later on, a revised computation was filed on 10.10.2008 showing loss of Rs. 7,23,56,799/-, which was on the ground that the assessee could not finalise accounts as on the date of filing the original return. The case was picked up for ....
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..... 1,00,10,209/- vide his order dated 29.8.2012 passed u/s. 143(3)/147 of the I.T. Act, 1961. 3. Aggrieved with the aforesaid order, assessee preferred an appeal before the Ld. CIT(A), who vide his impugned order dated 20.12.2013 has deleted the addition and quashed the reassessment thereby allowing the appeal of the Assessee. 4. Now the Revenue is aggrieved against the impugned order and filed the present appeal before the Tribunal. 5. At the time of hearing Ld. DR relied upon the order of the AO and reiterated the contentions raised by the Revenue in the grounds and requested that Appeal of the Revenue may be allowed. 6. On the contrary, Ld. Counsel of the Assessee has relied upon the order of the Ld. CIT(A) and stated that Ld.....
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..... I also find that the main observation of the AO that the appellant had claimed 'Network and Other Equipments Cost' as 'Circuit Expenses, which were clubbed under the, head revenue expenses, is also factually incorrect. Such mistakes possibly occurred as the AO did not bother to go through the revised computation of income, which was placed before the AO in the original assessment proceedings and which was accepted by him while passing order under Section 143(3), In view of the above, it is evident that the main grounds on which the reassessment proceedings were initiated were factually incorrect observation of the Ld. AO. Moreover, the assessment was reopened after four years and in which already an order under Section 143(3) ....
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....ction 40(a)(ia), the CIT(A) was fully empowered to determine such expenses as capital in nature and would have disallowed it accordingly. However, no such finding was given by the CIT(A). Moreover, the finding of the AO while recording the reasons, was based on factually incorrect facts. 5.3 Keeping in view the above, the re-assessment order passed by the AO is bad in law, without jurisdiction, and is required to be quashed. On the merit of the case as well, no, addition is called for." 7.1 After going through the findings of the Ld. CIT(A), as aforesaid, we are of the considered view that AO while recording the reasons for initiating proceedings under Section 147, has taken the amount of returned income at Rs. 78,68,673/- and a....
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....ore, the reopening of assessment could have been justified only where it was proved that the assessee had failed to make 'full and true disclosure' of material facts. Further, I find that the AO himself has, while recording the reasons mentioned that the observation that the assessee had claimed 'Network and Other Equipment Cost' as revenue expenses, was based on examination of file and documents placed on record. Since there was no independent source of such information and the AO only reexamined the file and documents, which was already subject matter of scrutiny under Section 143(3), it is evident that the action of the AO was clearly in the nature 'change of opinion', on which reassessment cannot be sustained as was held....